WASHINGTON: India is doing well in terms of vaccinating its own people and this is certainly helpful in its economy, a top International Monetary Fund official said on Tuesday as the global financial institution in its latest outlook projected 9.5 per cent growth rate for India in 2021.
"We don't have a change to our growth forecast for this year for India. I mean India came out of a very, very tough second wave and that led to a big downgrade in July but we have no change (in its growth rate projections) as of now," Gita Gopinath, Chief Economist of the IMF, told reporters during a virtual conference call on Tuesday.
India's growth projection released by the latest World Economic Outlook remains unchanged from its previous WEO update of July this summer but is a three-percentage point in 2021 and 1.6 percentage point drop from its April projections.
According to the latest WEO update, released ahead of the annual meeting of the IMF and the World Bank, India's economy which contracted by 7.3 per cent year due to COVID-19 pandemic is expected to grow by 9.5 per cent in 2021 and 8.5 per cent in 2022.
The world is expected to grow at 5.9 per cent in 2021 and 4.9 per cent in 2022.
The United States is projected to grow at six per cent this year and 5.2 per cent the next year.
China, on the other hand, the IMF said, is projected to grow at 8 per cent in 2021 and 5.6 per cent in 2022.
Gopinath said there are many challenges that the Indian economy already faces with regard to the financial market, with regard to the fact that the virus is not gone yet.
"The Indians are doing well in terms of vaccination rates and that's certainly helpful," Gopinath said in response to a question.
Malhar Nabar, who heads the World Economic Studies division in the IMF's Research Department that produces the World Economic Outlook (WEO), said that there is still room to provide more support if needed if the pandemic takes a turn for the worse, to provide it in a targeted manner to the worst affected households and firms.
"But going forward over the medium term, it was important to put in place a credible medium-term strategy to bring down the debt to GDP ratio, and create space to meet the future development needs and infrastructure needs of the Indian economy," Nabar said in response to a question.